Tax advisory

An opinion on the application of WHT preferences is a key tool for Polish payers who make payments exceeding PLN 2 million annually to a single foreign counterparty. The introduction of the pay-and-refund mechanism has revolutionised the settlement of international transactions, requiring Polish companies to withhold tax at the domestic rate (even up to 20%), irrespective of the provisions of double taxation treaties.

An opinion on the application of WHT preferences makes it possible not to apply the standard rate, enabling the direct application of an exemption or reduced tax rate already at the time of payment. Once the transaction threshold has been identified, obtaining the opinion becomes a priority for maintaining liquidity and avoiding the freezing of working capital in the accounts of the
tax office.

Unlike management board statements, an opinion on the application of WHT preferences issued by the Head of the Lublin Tax Office guarantees security for a period of up to 36 months. However, the process of obtaining it requires the payer to carry out an in-depth verification of the payment recipient's status as a beneficial owner. BTTP's support includes comprehensive preparation of an application, in which we demonstrate that the foreign counterparty carries out genuine business activity in its country of residence and is entitled to receive the payment. Records of documentary evidence — from the recipient's financial reports to an analysis of capital structures — are a key element of the proceedings, enabling the authority to confirm the right to preferential treatment of the transaction.

Many proceedings concerning the issuance of an opinion focus on examining the so-called business substance of a foreign entity, which, in the era of combating tax avoidance, is subject to rigorous scrutiny by tax authorities. BTTP offers support based on a thorough analysis of the counterparty's documentation before the application is submitted. We assist with interpreting rules on payments of dividends, interest and royalties within corporate groups.

By choosing BTTP, you can be certain that the security of cross-border payments is in the hands of experts who combine knowledge of international tax law with administrative practice. Professional management of WHT preferences is the basis for effective financing of international business structures and the key to building lasting relationships with global partners.